Latin America’s biggest carrier, LATAM Airlines Group SA, said on Tuesday that it has filed for Chapter 11 bankruptcy protection in the US. It’s seeking to restructure its debt after facing Covid-19-related financial problems.
According to the company, reservations, employee pay, and flight vouchers will not be affected. Passenger and cargo operations will also continue as normal.
“The US Chapter 11 financial reorganization process provides a clear and guided opportunity to work with our creditors and other stakeholders to reduce our debt, address commercial challenges that we, like others in our industry, are facing as a group,” LATAM said in a statement. “It is very different from the concept of bankruptcy in other countries and is not a liquidation proceeding.”
LATAM CEO Roberto Alvo cited coronavirus-related travel restrictions as a main driver for the decision to file for bankruptcy. “We have implemented a series of difficult measures to mitigate the impact of this unprecedented industry disruption, but ultimately this path represents the best option,” said Alvo.
“We are looking ahead to a post-Covid future and are focused on transforming our group to adapt to a new and evolving way of flying, with the health and safety of our passengers and employees being paramount,” he added.
The voluntary reorganization will include LATAM’s affiliates in Chile, Peru, Colombia, Ecuador and the United States. The airline, however, will continue to fly while it is in bankruptcy protection and its affiliates in Argentina, Brazil and Paraguay were not included in the filing.
The airline operated more than 1,300 flights a day and transported 74 million passengers last year. It had more than 340 planes in its fleet and nearly 42,000 employees on its payroll, according to its most recent annual company report.
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